Moving to a new state just to save a few bucks on taxes sounds like a cliché retirement plan, right? But honestly, when you're looking at your Social Security check and realizing the federal government already takes a bite, the last thing you want is your home state coming for the crumbs.
Most people think there are only a handful of "tax-friendly" states. In reality, as of 2026, the map looks way different than it did even two or three years ago. If you haven't checked the rules lately, you’ve probably got some outdated info.
Basically, the list of states that don't tax social security has grown significantly.
The Great 2026 Shift
Let’s get the big news out of the way first. West Virginia is officially done. After a multi-year phase-out, they’ve joined the club of states that completely ignore your Social Security benefits when tax season rolls around. It’s a huge win for retirees in the Mountain State.
But they aren't the only ones who’ve seen the light recently. Kansas, Missouri, and Nebraska all jumped on this train over the last year or two. It used to be a complicated mess of "if you earn X amount, we tax Y." Now? They’ve simplified things.
If you live in one of these 42 states (plus D.C.), your Social Security is safe from state-level income tax:
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- The "No Income Tax" Heavyweights: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. These states don't have a state income tax at all, so obviously, they aren't touching your benefits. (Note: New Hampshire is also in this group now that they've finished phasing out their tax on interest and dividends).
- The "Income Tax But Hands Off" Group: This is the majority. States like Alabama, Arizona, Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia, Wisconsin, and the newcomers mentioned above.
Why 2026 Feels Different
You might have heard about the "One Big Beautiful Bill" Act. It's a mouthful, I know. But for 2026, it introduced a new federal "senior bonus deduction."
If you’re 65 or older, you can snag an extra $6,000 deduction ($12,000 for couples) on your federal return, provided your income isn't sky-high. While this is a federal rule, it has a "halo effect." By lowering your federal Adjusted Gross Income (AGI), you might find yourself falling under the tax thresholds in the few states that do still tax benefits.
Kinda cool how that works out.
The "Holdouts" (And the Fine Print)
Only eight states are still holding onto some form of Social Security tax in 2026. But even here, it’s rarely a "tax on every dollar" situation. Most of them have "exit ramps" based on how much you make.
Colorado
If you're 65 or older, you’re basically off the hook here. You can subtract your full Social Security amount. If you're 55 to 64, it’s a bit stickier—you only get the full break if your AGI is under $75,000 (or $95,000 for couples).
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Connecticut
The Nutmeg State isn't as tough as its reputation suggests. You pay zero state tax on Social Security if your AGI is under $75,000 as a single filer or $100,000 for joint filers. Above that? You’re still only taxed on a portion of the benefits.
Minnesota
They use a "Social Security Subtraction" method. For 2026, if your AGI is under roughly $84,490 (single) or $108,320 (joint), you're likely paying nothing. If you earn more, the benefit starts to phase out. It’s a sliding scale that’s honestly a bit of a headache to calculate without software.
Montana
Montana is probably the "strictest" on the list. They follow the federal formula more closely. While they allow a small $5,500 subtraction for those over 65, high-income retirees will definitely feel the pinch here more than in, say, Florida.
New Mexico
They’ve actually become quite friendly. Unless you’re making over $100,000 (single) or $150,000 (joint), you aren't paying the state a dime on your Social Security.
Rhode Island, Utah, and Vermont
These three still use age and income hurdles.
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- Rhode Island: You generally need to be at Full Retirement Age and stay under certain income caps (around $107k/$133k).
- Utah: They give you a tax credit instead of a deduction. It’s sort of a "back door" way to make it tax-free for low-to-middle earners.
- Vermont: Full exemption kicks in if your AGI is below $50,000 ($65,000 joint). It’s one of the lower thresholds in the country.
The "Tax-Free" Trap
Here’s the thing: just because a state doesn't tax Social Security doesn't mean it’s cheap to live there.
Take Texas. No state income tax? Awesome. But have you seen the property tax bills in Austin or Dallas? They can be eye-watering.
Or Washington. No income tax, but they have a high sales tax and a capital gains tax for the wealthy.
Illinois is another weird one. They are actually a "pension paradise" because they don't tax Social Security or most pension income, yet their property taxes are among the highest in the nation. You’ve gotta look at the whole picture. If you save $1,200 a year on Social Security taxes but spend an extra $4,000 on property taxes, you’ve basically played yourself.
Actionable Steps for Your 2026 Planning
If you're looking at the map and thinking about a move, don't just pack the U-Haul yet. Do these three things first:
- Calculate your "Combined Income": Use the federal formula (AGI + Tax-exempt Interest + 50% of Social Security). This is the number most states use to decide if you're "wealthy" enough to be taxed.
- Check the "Senior Bonus Deduction": Talk to your CPA about the new $6,000 federal deduction for 2026. It might lower your AGI enough to make a "taxing" state actually tax-free for your specific situation.
- Run a "Total Burden" Simulation: Pick three states. Estimate your property tax, sales tax on a typical month of spending, and the income tax. Often, a state like South Carolina (which has an income tax but huge retiree exemptions and low property taxes) beats a "no income tax" state for the average person.
The 2026 landscape is much friendlier for retirees than it used to be. Most of the country has realized that taxing people's "safety net" is a bad look. Just make sure you aren't trading a small income tax bill for a massive tax bill elsewhere.